Wed Jul 13, 2011 3:14 pm
Responding to the potential and difficulties of China's market, Mr. Zang noted that while China Mobile's annual income generated from music is over than 15 billion RMB, yet content owners have barely received 100 million RMB in royalties. There is clearly a growing market driven by widespread mobile penetration (over 950 million subscribers) and popularity of services like ringback tones (or 'color tones' as they are referred to in China), but this is for naught if there is not a more equitable distribution of the revenues.
Mr. Zang also noted that the development of China's music industry is hampered by imperfections of the present legal system. Central to that discussion was Baidu's role in flooding the market with online pirated music. Even after being successfully sued by China Audio Video Copyright Association (CAVCA), Baidu's compensation ended up being less than 1 million RMB.
As such, CAVA has now proposed three conditions on Baidu. First, give record labels and artists a fair compensation for their economic losses as a result of piracy on Baidu. Second, take down all illegal MP3 links down. Third, cooperate with CAVA to contribute to the sustainable development of China's music industry. The conditions carry even more weight since Baidu joined the Alliance Of The Digital Music Industry (ADMI) which bound it to the "Alliance of the Digital Music Industry Convention." Mr. Zang also pointed out that the economic loss is not only monetary, but perhaps more devastating is the destructive impact piracy has had on Chinese music culture and the incentives to make music in the future.
Regarding piracy in China, Mr. Wang reinforced that the Chinese government is taking a very serious position on copyright issues and has taken strong efforts to cracking down on piracy. But often when the task is assigned at the local level, fears of losses to the local economy from enforcement (shutting down business and additional cost of royalties) may hamper enforcement on the ground.
Mr. Wang concluded by explaining how CAVA has expanded into a variety of activities at the local level that will have impact at the grassroots of the industry, such as the founding of National music industrial parks as well as establishment of music industry funding mechanisms. The association is also looking forward to working with western artists and professionals in order to learn from them as well as foster collaborations that would enable western musicians to develop our own mainstream art with Chinese characteristics.